The Canada Revenue Agency says the majority of submissions received so far under the government’s new Offshore Tax Informant Program [OTIP], which offers whistleblowers a potential reward, have come from Canadians informing on their fellow taxpayers, not corporations.
“Most submissions received [under the OTIP] have been received directly from individual informants to date, and most of those submissions have been in respect of individual taxpayers,” said Phil Kohnen, manager of the trusts section in the income tax rulings directorate with the CRA, during the agency’s roundtable session at the Canadian chapter of the Society of Trust and Estate Practitioners’ (a.k.a. STEP Canada) 2015 national conference in Toronto on Friday.
The Canadian government introduced the OTIP in January 2014 as part of a broader set of recent initiatives to combat international tax avoidance or aggressive tax evasion by Canadians. The program offers whisteblowers a reward of anywhere from 5% to 15% of the federal tax assessed and collected from the non-compliant taxpayer, if the information the whistleblower provided contributes to the collection of $100,000 or more of federal tax owing, and all the taxpayer’s appeal rights have expired.
From the launch of the program to the end of March 2015, the CRA received over 1,900 calls to the OTIP program, 522 of which were from potential informants, and 201 written submissions, Kohnen reported. Currently, there are over 100 cases being reviewed to determine if they qualify, and the OTIP is in the contractual stage with several informants. Cases that don’t qualify for the program are nevertheless referred to other CRA compliance areas, he said.
“[The CRA] doesn’t just toss them, obviously,” Kohnen says.
The types of possible non-compliance international tax issues identified through the program, so far, have been diverse, Kohnen said, and submissions received reflect the types of non-compliance that the program was designed to identify, suggesting that the program is working as planned.